UK and US buyers exit the country homes market
Country homes have had a busy few years with international buyers a-plenty. This has changed this year somewhat, mainly due to Brexit and the US elections. The UK buyer in particular had a close affinity to Ireland. An uncertain market has followed Brexit, however, with a dramatic decrease in demand from UK buyers for country homes. The weakening of sterling, in particular, has reduced the traditional UK buyers' spending power. The US buyer also tends not to purchase on the year of an election.
This year, however, we have seen the return of the Irish buyer - while buyers from other countries are now also looking at Irish country homes. Furthermore, the equestrian buyer has been particularly strong this year, particularly with regard to good quality limestone land.
Agricultural land prices are experiencing a challenging year. At the end of September, the average price of farmland nationwide stood at approximately €9,550 per acre according to the Sherry FitzGerald Land Price Barometer for Q3. Following a challenging opening half to the year, prices continued to fall in the third quarter of 2016. The average price of land across Ireland fell by a further 1pc in the three months to September, bringing the year-to-date decline to 2.5pc. This differs notably from the 1.6pc price growth over the same period in 2015.
An analysis of the type of land on the market reveals that prime arable land remains the most challenged, with average values declining by 1.5pc in the quarter and by 3.2pc annually, to stand at €11,350 per acre.
Tillage farmers throughout much of Ireland are particularly struggling this year with a poorer production of crops. This has led to a weaker demand for land reinvestment, coupled with farmers being forced to sell for a lower price per acre than they would have hoped to achieve. Prime grassland values fell nationally by 0.9pc in the three months to September to stand at approximately €10,700 per acre. This represents a year-on-year decline of 2.9pc.
Some blue skies are on the horizon, however, due to Budget 2017, with the amended income averaging scheme addressing the current issue of income volatility - a key factor behind the uncertainty witnessed in the agri-land market. This would go somewhat towards helping the cash-flow shortages experienced in farming at present, and may perhaps in time bring some stability back to the land market.
Overall, all eyes are looking forward to spring 2017, which will hopefully bring more stability and confidence to both the country homes and agricultural land markets.
Roseanne De Vere Hunt is director of Country Homes, Farms and Estates at Sherry FitzGerald